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Label head honcho fined $6.8 million in French case same day he reaps millions on the market from potentially putting company up for sale — while seeking to buy EMI Music

Easy come, easy go, Edgar Bronfman Jr.

As news of his decision to explore the sale of Warner Music Group pushed the value of his stake up nearly $10 million Friday morning, a French court convicted Bronfman and Jean-Maire Messier of insider trading. That conviction came with a $6.8 million (5 million Euros) fine in a case stemming from his sale of shares in Vivendi the failed media empire Bronfman and the former CEO once tried to build.

The legal setback came amid reports that Bronfman has commissioned Goldman Sachs to arrange a possible sale of Warner Music even as the Wall Street firm tries to broker Warner’s purchase of beleaguered EMI Music.

Bronfman said in a statement Friday that he's appealing the insider trading conviction “My trades were proper,” Bronfman said in an e-mailed statement, adding that he will l appeal the ruling in the long ongoing case. In another statement, Warner Music director Scott Sperling said the company “fully supports Mr. Bronfman as he appeals this verdict."

Bronfman was vice chairman of Vivendi, a French water company aspiring to expand into entertainment, from 2000 to 2003. He was accused and convicted of reaping almost $13 million from exercising stock options based on insider information. He also received a 15-month suspended sentence.

That Bronfman, father-in-law to singer M.I.A. among other accomplishments, is of two minds about the music business apparently occurred to him after suitors, including private equity dynamo KKR, recently sought to entice his management team and controlling shareholders to sell out.

Instead of dealing, however, Bronfman opted to hire Goldman to explore an auction that might fetch a higher price than a negotiated sale with a single prospective buyer.

On the other hand, with Goldman doing Warner’s bidding, Bronfman and his posse could land EMI Music.

The two-track strategy epitomizes the bewilderment in the upper echelons of an industry in the decade-long throes of digital disruption. Today, 99-cents digital singles, not $12.99 CDs, are the preferred music to consumers’ ears.

Bronfman is betting that news of Warner Music going on the auction block might spur current owners Terra Firma and likely future owners Citigroup to decide the disposition of EMI, according to one person familiar with his thinking. With its debt load and smaller market share, EMI is a less attractive asset than Warner Music, with could draw more interest from anyone kicking the tires of music companies.

Warner Music’s and EMI Music’s banding together may be the only hope for survival by the No. 3 and No. 4 major-label companies among the Big Four that dominate the global music business.

A combination could yield economies, resulting in hundreds of layoffs and purged artist rosters. Warner-EMI would emerge from a deal to battle with No. 1 Universal Music Group and No. 2 Sony Music for each other’s dwindling market shares.

With backing from private equity hotshots Providence Equity, Thomas H. Lee Partners and Bain Capital, a Bronfman-led group bought Warner Music seven years ago for $2.6 billion from Time Warner. The group scored a hefty return from dividends and in a public offering that provide liquidity while leaving the original investors in control.

Three years later, in 2007, British private equity heavyweight Guy Hands’ Terra Firma purchased EMI Group, a giant record company and music publisher, for almost $7 billion, with billions in loans from Citigroup. The ill-fated transaction closed as the global economy collapsed, freezing credit markets in which Hands had expected to refinance the debt.